Linux for Suits: Scoring 100

Before the dot-com era, there was no such thing as a “Linux company”. Afterward it was hard to find a major company in computing that didn't run Linux or sell goods that ran on it.

The biggest word in today's
Wall Street Journal is LINUX. Actually, LINUX
is tied with UNIX, WINDOWS, CHECKBOOKS, ROCKS and DB2. All are in
the headline of a full-page ad by IBM on page B3—the first page
that accepts advertising—in the Marketplace section of the
newspaper.

This afternoon (I'm writing this in late May) Hewlett-Packard
is announcing a deal with Reuters to move that company's Market
Data Systems to HP ProLiant servers running Linux. The deal spans
three to five years and could exceed $200 million.

HP says it won that piece of business over IBM and Sun, both
of which also are growing Linux providers. IBM has all but
embarrassed itself with its public declarations of love for Linux,
getting busted last year for scrawling Linux graffiti on public
property. Sun, meanwhile, has been struggling to find a way to be
pro-Linux without hurting its high-end Solaris business.

So it would understate the matter to say Linux is a hit with
big systems OEMs, and the trend hardly stops there. A year ago
Linux was big in only one obvious category: web servers. Now it's
spreading out. HP says its latest sale “demonstrates the growing
presence of Linux in the financial services market”, a market that
used to be synonymous with highly proprietary software and
hardware. HP pointedly adds, “This also places HP in a strategic
position as the financial services market moves from Sun Solaris to
Linux.”

Proprietary UNIX systems aren't the only ones threatened.
Yes, Windows is still a monopoly, but for how long? Several years
ago that would have been a ridiculous question, but now it's not.
Microsoft seems to have declared war on Linux and open-source
software—a strategy that is backfiring terribly. Today's papers
bring news that Microsoft reportedly has been trying to convince
the US Department of Defense that open-source software poses both a
threat to security and to the company's intellectual property.
Meanwhile the DOD had a report prepared by MITRE Corp. that
identified 249 uses of open-source systems and tools, including the
Defense Intelligence Agency's web portal and network security
software for the US Army and Air Force. MITRE itself maintains a
library of open-source products, including mobile mesh networks and
CVW (Collaborative Virtual Workspace). MITRE even maintains some of
its open-source software on SourceForge.

Even where Linux isn't the operating system of choice, it has
opened the door for other free and open forms of UNIX, such as BSD,
which was adopted into Darwin, the open-source foundation of
Apple's OS X. These events have increased vastly the population of
the world's Linux-friendly PCs and servers. At a recent conference,
I asked Steve Jobs if it was true that the company's new
rackmounted X servers were expected to augment, rather than
replace, existing UNIX systems. He said “yes”. After I asked him
what other kinds of UNIX crops prevail in potential customers'
server farms, he started his list with Linux.

His answer is not surprising. Here's a rundown of Google
results for a variety of operating systems and related
topics:

Linux: 47,100,000

Windows: 43,800,000

UNIX: 12,200,000

Open Source: 2,740,000

Free Software: 1,760,000

This is a far cry from 1993, when Phil Hughes included me in
an e-mail list that explored opportunities for a free-software
magazine. After batting ideas around for a while, Phil suddenly
announced that his little company, SSC, was going to start a
magazine for Linux, the brainchild of a 21-year-old guy from
Finland.

I thought Phil was nuts. But Phil is very instinctive about
stuff other people don't see. A few years later, during a visit to
my house, Phil showed me KDE running office applications that
looked remarkably like what one saw on Windows. Yet everything he
showed me was free and open. It blew my mind so much that I took
him up on his offer to join the masthead. This was in early 1999,
when the venture capital was still flowing like Niagara and Linux
had an effect on investors that was something like Viagra. By the
end of that year, three of the biggest IPOs in the history of
American business were for companies strongly identified with
Linux: Red Hat, Cobalt and Andover/VA Linux. VA's IPO in December
flew to over $300 per share on day one before settling at over
$200. For a few months there was no shortage of Linux
billionaires.

I recently purged my pile of business cards and took a
picture before tossing the stack into recycling. They told an
interesting story.

Some companies were out of business. That was the
case with Linux Laptops, Rebel.com, Loki, Eazel and OpenSales,
which changed its name to Xelerate (was it one l or two?) before
going away.

Other companies, like Kerbango and Cobalt, were
bought up by larger companies—in these cases 3Com and Sun. 3Com
killed off Kerbango and its cool little radio, while Sun has
reportedly done pretty well using Cobalt to hold up the low end of
the company's server business. The Cobalt Qube remains a benchmark
Linux server appliance.

Others are shifting their focus away from Linux .VA
Linux, which was once so identified with the L word that they paid
seven figures for the Linux.com domain name, paid over $1 billion
in stock for Andover and traded on Wall Street as LNUX, has changed
their name to VA Software.

Corel, after trying to create a kind of
consumer/productivity software business around Linux, jettisoned
Linux along with a lot of other ballast in an effort to stay
afloat.

Linuxcare is still alive, although without its
founders, who are off making news with Sputnik, a new company in
the mobile wireless network market.

Other companies, like Boxx (not Boxx Technologies,
currently operating in Austin, Texas), which made (or at least
prototyped) a fancy Linux/Windows hybrid laptop, simply
vanished.

Two related market experiments (which I was very
enthused about), CoSource and SourcExchange, quietly folded.

There are success stories too. Linux-based TiVo is
synonymous with the small but closely watched digital video
recorder business. Borland, no longer burdened by the forgettable
name Inprise (which was on several of my tossed business cards), is
reportedly doing very well with Kylix, its cross-platform Linux
development environment.

SuSE shrank its operations in the US but remains
the leading Linux distribution in Europe and is strong worldwide as
well. Caldera is holding on pretty well. So is Turbolinux.

The big winner is a company with no cards in my pile, Red
Hat, which still proudly flies the penguin flag and remains by far
the leading Linux distribution. (We modestly point out that the
name of the editor atop our first issue's masthead was none other
than Red Hat founder Bob Young. Coincidence?)

It's easy to put down all the dot-com enthusiasm and to damn
Linux with the failure of the whole dot-com, um, “model”. The
phenomenon had its upside as well. It helped make Linux a household
word and funded a variety of projects that thrive today. One
example is SourceForge, which hosts over 40,000 projects and
430,000 registered users.

Here at Linux Journal, we've been
through the hard times along with the rest of the surviving Linux
companies. What's kept us going is the steady march of Linux toward
what Linus Torvalds half-jokingly called world domination.

After 100 issues, Linux Journal has
become the leading Linux how-to magazine for countless
technologists—software and hardware companies, government
organizations, medical and scientific institutions and third-world
economies that need maximum productivity with minimal cost. We're
in great shape, and so is the world Linux now dominates: operating
systems.

Linux has finally done what UNIX devotees have wanted for
decades: it has driven the OS to ubiquity. Today the only UNIX
systems with any future are free, open and ready for improvement by
anybody who wants to jump in and help. That's one heck of a success
story.

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